The latest insights from the Central Bank of Jordan (CBJ) are indicative of an insurance sector in confident expansion. GWP for the Jordan insurance industry grew almost 8% to JOD800m ($1.1bn) in 2024. Non-life premiums (including medical) commanded around 82% market premiums and life insurance business 17.5%.
Paid claims reached JOD534.5m in 2024 up from JOD501m in the preceding year, a 6.7% increase. Non-life paid claims grew by 8% to JOD285m, medical by 5% to JOD197m while life paid claims grew by around 6% to JOD52m.
Medical on the ascendant
Medical insurance business has grown over the years to its current share of over one-third of the market operations, edging out motor insurance which historically controlled the lion’s share of the market (around 47% in 2022).
Medical insurance premiums grew by 14.3% in 2024 reaching JOD248m. It was the second fastest line of business after marine and transport (3% of the market) but the most influential considering its share of the pie. Concurrently, paid claims for medical reached JOD197m (37% of the market’s total paid claims).
Post COVID-19 awareness of medical insurance has contributed to its growth. Around 91% of medical insurance premiums originate from corporate (employer-financed) policies suggesting a strong link between employment and access to medical coverage.
Yet, this means a cautionary note, of the increase in medical insurance claims and the rocketing costs of healthcare services, is in order. Over the past couple of years, the industry has been in dispute with various healthcare providers, including physicians and pharmaceuticals, over demands to raise their fees. Compounding this is the constant price of technological advancement.
Changes in motor insurance market
Motor insurance is the cornerstone of the Jordanian insurance sector. Firstly, the mandatory motor third-party liability (MTPL) business is considered a major cash generator for insurers. In addition, the high retention rate for motor insurance (estimated to be over 95% including the local cession, against below 70% for the market average) gives it a big heft in shaping overall market outcomes. Motor insurance paid claims account for almost half of the market’s overall bill, which solidifies its role in determining market profitability.
Insurers have long called for revision of MTPL rates, set in 2002, to be adjusted for inflation and increase in cost of repairs as well as higher wages.
At the start of 2025, the CBJ introduced measures addressing claims settlement timelines in relation to claims values. The bank steered clear of raising the tariff and chose to keep the existing premium structure while reinforcing the no-claims discount of 15%. It, however, implemented a JOD12 additional charge for traffic violations with estimates that the new levy would raise an additional JOD9.8m in premiums for insurers this year.
In an interview with Middle East Insurance Review, Gulf Insurance Group Jordan CEO Dr Ali Al-Wazani advised against overstating just the financial impact of these charges. He pointed instead to the significant indirect effect of the levy on improving drivers’ performance, leading in turn to better motor insurance results.
Life and personal lines: drivers of growth
Life insurance business continued to grow despite limited disposable income among citizens along with a cultural mistrust of the product. CBJ reported that MetLife was the sole specialised life insurer in the market with another 15 insurers licensed to sell life insurance products.
In 2024, life insurance premiums grew by 6% to JOD140m compared to higher growth rates of 9.3% and 12% in 2023 and 2022 respectively. A major trend that has taken hold over the past few years is heightened demand for investment-linked and annuities with the former increasing by 31% in 2024. While investment-linked premiums only account for 32% of overall life insurance premiums (or around 4% of the market GWP), the growing appetite for savings and investment products indicates that more financially sophisticated clients are entering the market and the gradual evolution of a more diversified life insurance portfolio.
Personal lines are also changing direction. Dr Al-Wazani forecast that life and personal lines, and SMEs, will gradually dominate the scene and drive growth in the coming years. “We expect that by 2030, growth of individual insurance covers will outpace that of corporate insurance policies.”
A market in transition
Preliminary results released by the Jordan Insurance Federation (JIF) for the market’s 18 operating insurers in 2024 reveal that almost half of the market GWP is firmly controlled by five insurance companies.
The same concentration is mirrored in market profitability. The latest available CBJ official figures, in 2022, show that net income before tax for the top five operators accounted for over 83% of the market’s overall profit. However, this does not necessarily lead to a bleak view of a market in which regulatory actions are constantly changing market dynamics.
Regulatory intervention to limit fragmentation
As insurance regulator from 2021, the CBJ has activated several regulations to improve the standards of the industry and quality of providers to instil confidence in the sector.
The supervisor has acted against the underperforming players and suspended some who are unable to commit to policyholders’ rights. A recent move was the bank’s decision to liquidate Arab Union International Insurance company (AUII) in January 2025, to protect the rights of policyholders and beneficiaries of insurance contracts.
Similarly, 31 March 2025 marked the end of the grace period granted to insurers to raise their capitalisation, a rule issued in 2023. Life or general insurers are required to have a minimum capital of JOD8m (up from JOD4m) while composite insurers need to have a capital base of JOD16m. This decision is expected to push some players to give up their life insurance licences and could possibly direct some to consider mergers to survive. The word in the market is that there are currently two operators who are already in due diligence for a potential M&A.
This, along with the pressure of the CBJ on operators to adopt prudent business strategies, is expected to ultimately consolidate the marketplace.
New law dedicated to insurance
Last March, Jordan’s Council of Ministers lent its weight to the rationale for a new insurance law. The bill will be reviewed by the Legislation and Opinion Bureau in the hope of issuance within the year.
The draft law outlines legal provisions pertaining to insurance contracts and the specificities of some branches of insurance, such as life, fire and property damage, medical and marine insurance. It also provides a comprehensive reference framework detailing all stages of the insurance process, from the pre-contract to the conclusion and implementation stage.
Currently, insurance cases are subject to civil law, limiting the scope of regulations that address insurance. According to Dr Al-Wazani, the new law will make a great difference. “This is one of the advantages of having the CBJ in charge of supervision because it possesses the power and authority to head on with such a bold project. There has been a dedicated banking law for a while; it is time for the insurance sector to have the same.” M